Buying your first car can be difficult since most young people cannot afford to make such a purchase. But with the availability of financing at reasonable rates, this type of purchase can be a reality. Following are some guidelines which may help you to obtain your first car.
Browsing through the newspaper or watching car ads on TV can be very misleading. You will see car dealers offering some pretty unbelievable deals so that you can drive away in a nice bright, shiny car. Offers like zero percent financing, and extremely low payments can easily lure the inexperienced buyer into a “nightmare” of a real deal. All car dealers put these deals out there to attract everyone and anyone they can. But they know that the real bait is the young driver who needs a car. Once you sign on the dotted line, with a deal such as this, you can end up actually paying more than the standard rates. Technically, the car dealer is not lying about the zero percent interest rate loans, but what they are not telling you is that your credit rating has to be close to perfect to qualify.
One way around this problem is to finance your car through a dedicated finance company instead of through a bank or the dealership. The dedicated finance company will usually have a more reasonable lending rate thus making the transaction more feasible for the new buyer. But even with this type of company they will require a down payment plus you will need to provide proof of the value of the car. Don’t panic and feel targeted. This is pretty normal procedure in the lending business. The reason for this policy is to give the lender a safety net in case the loan defaults for any reason. If the loan does default then the lender has the car as collateral. In the long run this will also benefit you since it provides you with a safeguard when purchasing the car as far as the price and the deal are concerned.
How to obtain the loan for used cars (actual info – Feb. 2017)
Before you apply for the car loan on second hand car, do a check on your credit rating. By doing this before hand, you will get a better idea of what you can afford. In some cases, it may be difficult to obtain a loan at all due to a low credit score or the fact that you may not be able to meet the required down payment on the vehicle. Many times you will be aware of this when you determine your credit score. An additional problem can be in the obtaining of insurance. The type of car you are considering will be a major factor in this area. If you are dealing with an online company, they may try and snag you with “one-day offers.” They tell you that this is a one time deal for today only. Don’t get hooked on this approach. They will offer an equally good deal tomorrow and the next day and the next day and so forth. Be sure whoever you deal with, that you are comfortable with the entire deal. Don’t make a move until you are. Don’t forget, once you sign your name, you can be stuck for a few years. Plus, you don’t want to get in over your head and then default on the loan. That could be devastating to your credit rating.
Make sure that you create a file for all of your paperwork for this transaction. Keep everything they give you and everything you read. When obtaining the loan online, make sure that you print everything out and keep it in your file. If you are not sure of something, then ask. Never be afraid of asking and don’t think that your questions are dumb. There is no such thing as a dumb question when it deals with something you do not understand. Be sure and protect your own interests.
Once you get the car loan on second hand car you may want to check into refinancing. If you do this online, you can calculate the refinancing rate. It may end up saving you a bit of cash in the long run.